competitiontribunal
SOUIHAFRICA
COMPETITION TRIBUNAL OF SOUTH AFRICA
In the matter between:
Afrique Pet Food (Pty) Ltd ("Afrique")
And
The Dry Pet Food Business of Philafrica Foods (Pty)
Ltd
Panel: E Daniels (Presiding Member)
Case No.: LM177Dec20
Primary Acquiring Firms
Primary Target Firms
Heard on:
H Cheadle (Tribunal Panel Member)
Y Carrim (Tribunal Panel Member)
24 March 2021
Order Issued on: 24 March 2021
Reasons Issued on: 24 March 2021
ORDER
Further to the recommendation of the Competition Commission in terms of section
14A(1 )(b) of the Competition Act, 1998 ("the Act") the Competition Tribunal orders that-
1. the merger between the abovementioned parties be approved in terms of section
16(2)(a) of the Act; and
2. a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule
35(5)(a).
Presiding Member
Mr Enver Daniels
Concurring: Ms Yasmin Carrim and Mr Halton Cheadle
24 March 2021
Date
competitiontri bu nal
SOUTH AFRICA
Notice CT 10
About this Notice
This notice is issued in
terms of section 16 of
the Competition Act.
You may appeal
against this decision to
the Competition
Appeal Court within 20
business days.
Contacting
the Tribunal
The Competition Tribunal
Private Bag X24
Sunnyside
Pretoria 0132
Republic of South Africa
tel: 27 12 394 3300
fax: 27 12 394 0169
e-mail: ctsa@comptrib.co.za
Merger Clearance Certificate
Date : 24 March 2021
To : Webber Wentzel Attorneys
Case Number: LM 177Dec20
Afrique Pet Food (Pty) Ltd ("Afrique") and the Dry Pet Food
Business of Philafrica Foods (Pty) Ltd
You applied to the Competition Commission on 14 December
2020 for merger approval in accordance with Chapter 3 of the
Competition Act.
Your merger was referred to the Competition Tribunal in terms of
section 14A of the Act, or was the subject of a Request for
consideration by the Tribunal in terms of section 16( 1) of the Act.
After reviewing all relevant information, and the recommendation
or decision of the Competition Commission, the Competition
Tribunal approves the merger in terms of section 16(2) of the Act,
for the reasons set out in the Reasons for Decision.
This approval is subject to:
0 no conditions.
D the conditions listed on the attached sheet.
The Competition Tribunal has the authority in terms of section 16(3)
of the Competition Act to revoke this approval if
a) it was granted on the basis of incorrect information for which
a party to the merger was responsible.
b) the approval was obtained by deceit.
c) a firm concerned has breached an obligation attached to
this approval.
The Registrar, Competition Tribunal
This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998) .
competitlontribunal
SOUTHArRICA
COMPETITION TRIBUNAL OF SOUTH AFRICA
Afrique Pet Food (Pty) Ltd (Primary Acquiring Firm)
and
Case no: LM177Dec20
The Dry Pet Food Business of Philafrica Foods (Pty) Ltd (Primary Target Firm)
REASONS FOR DECISION
[1] On 24 March 2021, the Competition Tribunal unconditionally approved the large merger
between Afrique Pet Food (Pty) Ltd ("Afrique") and the Dry Pet Food Business of
Philafrica Foods (Pty) Ltd ("Philafrica Target Business").
[2] The transaction involves Afrique acquiring control of Philafrica Target Business.1 This
is the first part of a divisible transaction. The second part involves Afrique acquiring
control of part of the dry pet food business of Martin and Martin (Pty) Ltd.2
[3] Afrique is a newly incorporated company, and it does not control any firms.3
[4] Philafrica Target Business currently manufactures and sells dry dog food under its
brand JOCK and co-manufactures dry pet food for other brand owners.4
[5] The Competition Commission identified no horizontal or vertical overlaps in the activities
of the merger parties. Therefore, the transaction will not result in any market share
accretion or changes to the market.
[6] which has an agreement with Philafrica in
terms of which Philafrica co-manufactures and packages certain of s pet food
brands, expressed a concern that this agreement will be terminated early as a result of
the transaction and thus, negatively impact business. However, the
Commission found that the merged entity has no ability or incentive to terminate the
existing agreement and as a result, will not foreclose We find no reason to
disagree with the Commission's findings.
1 Philafrica Target Business comprises the dry pet food manufacturing business of Philafrica Foods
(Pty) Ltd ("Philafrica") at its manufacturing facility in lsando.
2 The Tribunal simultaneously approved the second part of the transaction under CT case number:
LM171Dec20 on 24 March 2021.
LM171Dec20 on 24 March 2021.
3 Afrique is currently a wholly owned subsidiary of Philafrica, which is in turn controlled by AFGRI
Group Holdings (Pty) Ltd, an entity ultimately controlled Prior to
the implementation of the proposed transaction, QSA Holdings Limited ("QSA") will acquire 50% of
the ordinary issued share capital of Afrique, such that Afrique will be jointly controlled by Philafrica
and QSA.
4 Such as Nutribyte, SA Complete Pet Food and PnP (in respect of its Nutriphase brand).
[7] We conclude that the proposed transaction does not substantially prevent or lessen
competition in any relevant market.
[8] In relation to public interest considerations, the Minister of Trade, Industry and
Competition (DTIC) required that the employees of the Philafrica Target Business being
transferred to the merged entity, do so on conditions no less favourable than their
current employment. The merger parties confirmed that the employees of the Philafrica
Target business will transfer to Afrique on either (i) new terms and conditions mutually
agreed upon with the merged entity; or (ii) if no mutual agreement can be reached, will
transfer as per section 197 of the Labour Relations Act of 1995.
[9] Further, the merger parties also made an unequivocal undertaking that there shall be
no retrenchments as a result of this transaction.
[1 O] We also note that the transaction will not have a negative effect on the level of Broad-
Based Black Economic Empowerment or worker ownership in the merged entity.
24 March 2021
Mr Enver Daniels Date
Ms Yasmin Carrim and Mr Halton Cheadle concurring.
Tribunal Case Manager:
For the Merging Parties:
For the Commission:
D Mogapi
D Rudman and A Liebenberg of Webber Wentzel
W Gumbi and N Myoli